Institutionalising innovation excellence

Tags: Op-ed
Institutionalising innovation excellence
AFP
NECK TO NECK: In the entry-level sedan car category, there is almost a ‘winner-takes-all’ battle raging between major automobile makers. Maruti’s Dzire is being challenged by Honda’s Amaze and Hyundai’s i20, among others
An innovation essentially is a commercially viable idea whose time has come. In the organisational context, harvesting of ideas and converting them into world-class products is a necessary condition to survive and grow. Unfortunately, few organisations are geared and structured for tapping the full creative potential either of their employees or of the opportunities existing in the market.

Innovative excellence (IE) means ensuring continuity of innovation pipeline. For this, the company has to institutionalise a work ethos that focuses on the entire value-chain from idea to markets, and the key stakeholders. These ambit the company’s culture, structure, and infrastructure mantles, and underscores leadership mindsets. Institutionalised innovation excellence is a sequential (and often mutually iterative) process between internal capabilities, industry trends and shifting market demands.

IE cannot exist in isolation. It requires an ecosystem comprising a facilitative organisational environment, a competitive industry, demanding consumers and a regulatory societal pressure to perform wonders. Amidst mediocrity, such excellence can exist in pockets and niches, from where it may be possible to scale-up at other industries. In the entry-level sedan car category, there is almost a ‘winner-takes-all’ battle raging between major automobile makers. Maruti’s Dzire and Swift are being challenged by Honda’s Amaze and Hyundai’s i20, among others. Each manufacturer has to excel in every part of the value-chain just to survive for there is no scope for mediocrity.

In the new world of technology-driven innovations, there are essentially two roads to excellence, viz market needs (call these opportunities) and problem-solving approach. In the first case, technical ideas are driven by carefully observing the macro-trends for early indicators, including market forces, technology developments, and changes in industry structure, among others and then determining where the business is heading. For this, the company would have to use some robust decision-criteria (otherwise it can become random goose-chasing). In the second case, close stakeholders such as customers, suppliers, and employees suggest their requirements or indicate bottlenecks and ask for real-world solution. This necessitates close interaction and healthy relationship with the stakeholders so that a two-way communication is maintained in a pleasant and productive environment and solutions can be arrived at. For example, a robotics company was able to speed up the automated sheet metal car parts transfer press line that resulted in increase of output of the line by one part per minute in the auto industry. This was a significant improvement in efficiency, quality, and value added for its customers. However, it required long negotiations with the car producers since it required the latter to make substantial investments in new manufacturing lines.

Communication between the leadership and team members is often a major challenge especially if the new idea fundamentally changes the existing and conventional processes. Obstacles have to be overcome through positive thought reinforcements since true innovation may not have a ready path to follow. In every case, once the strategic direction is decided, the next step is to initiate action by putting the right team in place (including those with sharp business acumen).

The defining attribute of excellence is consistency of performance. Sports being the flavour at present, it may be appropriate to draw analogies from the tennis world to understand this. Andy Murray — the British tennis player — has been amongst the top four players for quite sometime, yet has failed to win many Grand Slam championships, compared with Federer, Nadal, and Djokovic. Consistency has many attributes — mental toughness and physical stamina, ‘cool’ temperament, and persistence. Excellence is not confined to just one singular performance metric as the yardsticks could be different and at multiple levels of performance. Nadal is almost unbeatable on clay court, while Federer is peerless in all-court craft and finesse.

Extrapolating, innovative excellence is not about managing or controlling resources, it is about letting the creative juices of employees flow freely through open structures. Excellence is not directed at or a result of competition, but it has the potential to substantially alter the industry and competitive forces. Excellence can exist anywhere. It happens when the pursuer transforms the activity into an art form. It is a combination of skill, subtlety, and humility.

The Indian consumer is known to be highly price sensitive (across the world, she is known to search the internet most for better deals) and at the same time, is extremely value conscious. These two attributes make the Indian market unique. In the smartphones space, well-established global companies such as Sony and Nokia have been struggling, while new local upstarts such as Micromax have made huge inroads. Success will come only to those who can consistently create products and services that are high in quality and low on prices.

For Indian companies, it is a lifetime opportunity to embark upon a long, successful journey. Once the innovation excellence processes are institutionalised, India and Indian firms would be able to beat not only the Chinese (and others) but can also straddle the world with globally acceptable products. We are on the cusp of revolutionary opportunities and we need leadership for grasping these!

(The writer is a professor of strategy and corporate

governance, IIM-Lucknow)


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